CVG had a chance to talk to Valve recently, and while the full interview has not been made public yet, they did release a small snippet. This snippet discusses how Valve feels gameplay and enjoyment win out over pretty visuals any day.

Here's Valve's Doug Lombardi talking about how Portal managed to win the hearts of everyone without visuals that only a handful of machines could run.
Before it came out, Portal failed to convince all those who like nice graphics. But when it came out it had really solid gameplay and a clever story, and so it won over 30 Game of the Year awards.

"It's more about what you can do in the game. Graphics have started to top-out now. We've got really great-looking games but what we want are more intelligent, more visceral games and the multi-core processors are going to be the way that we get there on PC.
The full interview will be released later this week.